Page last updated at 15:37 GMT, Monday, 16 June 2008 16:37 UK

Lehman Brothers posts $2.8bn loss

Lehman Brothers office
Lehman has had a torrid few months

US investment bank Lehman Brothers has posted a quarterly loss of $2.8bn (1.4bn), the first for the Wall Street bank since it went public in 1994.

America's fourth largest investment bank blamed the loss on a series of trades and hedges that went wrong.

The bank last week announced it needed $6bn in fresh capital to shore up its finances and demoted two senior directors to lift investor confidence.

Lehman Brother shares have fallen 60% this year.

Chief executive Richard Fuld said the firm was taking steps to ensure this quarter's "unacceptable performance" was not repeated.

Lehman said it had cut its exposure to residential and commercial mortgages and other property-related investments by 20%.

Like the rest of the sector, Lehman shares have been hit by the subprime mortgage meltdown and the global credit crunch.

Last week, the bank warned that it would report a quarterly loss - driving its shares down more than 20%.

The news triggered a crisis of confidence in the company's management, and forced the demotion of Chief Financial Officer Erin Callan and Chief Operating Officer Joseph Gregory.

However, traders took comfort from comments from Lehman bosses on Monday that the worst may be over for the investment bank, sending shares up 7%.

Global banks and brokerages have written down nearly $300bn worth of assets because of exposure to America's subprime mortgage market.

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